If an Auditor Were Concerned with Obtaining Evidence About the Appropriateness

question 54

Multiple Choice

If an auditor were concerned with obtaining evidence about the appropriateness of the value of inventory, which of the following tests would be most appropriate?

• A)Compilation tests
• B)Price tests
• C)Confirmation of inventory held by outside parties
• D)Physical examination of the inventory

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Definitions:

Consumer Goods

Products that are sold directly to consumers for their personal or household use, typically including items like electronics, appliances, and clothing.

Capital Goods

Long-term assets such as machinery, buildings, and equipment purchased by businesses to produce goods and services.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs, assuming full and efficient utilization of resources.

Opportunity Cost

The exclusion of favorable outcomes from different choices upon selecting one option.